The Paradox of Static and Dynamic Ambidexterity

This paper introduces the concept of dynamic ambidexterity, which
arises from a firm’s ability to adapt its
exploitation-exploration balance over time. Building on the
strategy-environment coalignment literature, we argue that dynamic
ambidexterity leads to higher firm performance than the more static
forms of ambidexterity described in previous studies. While we
introduce the concept of dynamic ambidexterity, we highlight a novel
paradox for ambidextrous firms. We show that static ambidexterity
has a self-reinforcing effect: while firms become increasingly adept
at balancing exploitation and exploration over time, their ability
to adapt this balance to changing environmental conditions declines.
Ultimately, static ambidexterity crowds out dynamic ambidexterity,
which harms firm performance. Based on a longitudinal sample of the
global insurance industry, we find empirical support for our
arguments. We contribute to the organizational literature by
developing a more dynamic understanding of ambidexterity and reveal
how some of the previously described practices to promote
ambidexterity can trap firms in downward spirals rather than
preventing them.

SMS 32nd Annual International Conference (Prague CZ. Winner of the
Best Conference PhD Paper Prize; Finalist for the Best Conference
Paper Prize for Practice Implications; Nominee for the Best
Conference Paper Prize)

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